European Parliament accepts proposal for flawed Juncker Plan

The European Parliament, Council and the Commission have reached an agreement during the final round of negotiations that lasted all night last night, 27th May, on the creation of the European Fund for Strategic Investments (EFSI). The final vote in Plenary will take place on 24 June.

The particularly long negotiation procedure concentrated heavily on the dissensus between the Parliament and the Council around the financing of the EFSI guarantee fund.

The Commission's proposal included a cut of EUR 3.3 billion (bl) to the Private Public Partnerships programmes for energy, telecommunications and transport (2.7bl) and on Horizon 2020. The other remaining 2bl were to come from the unallocated margins of 2015, 2016 and 2017.

The agreement reached early this morning reduced by 1bl the cut to CEF and Horizon 2020, to 2.8bl and 2.2bl respectively. The European Parliament position avoided the damaging impact of the proposed cuts in particular to Marie-Curie actions, kicks, JRC.

Beyond the financing aspects, the complexity of the negotiations was aggravated by the fact that the EFSI will bring an enlargement of the EIB competences and operation scope. The plan per se represents less than 1% of the EU BUDG, which is already less than 1% of the EU GDP.

Fabio De Masi, GUE/NGL shadow rapporteur on EFSI for the Economic and Monetary Affairs Committee said: “Parliament managed to get some marginal improvements into the EFSI regulation, but its concept remains fundamentally flawed. More specific criteria for project selection do not change the fact that stripping public assets to the benefit of private investors remains the key element of this plan. There is ample liquidity in financial markets which could easily be recycled for a true public investment programme with much greater net returns to society”.

“This could be led by the EIB with backing from the ECB as well as by member state governments, if they were to scrap the stupid straightjacket that is the fiscal compact. Instead the EFSI creates a profit-guarantee scheme for private institutional investors, at taxpayers' cost. What Europe needs is a New Deal of 500bl euros additional public investment annually over ten years to kick-start the economy and bring an end to the economic and social crisis.”

Liadh Ní Riada, GUE/NGL shadow rapporteur on EFSI for the Budgets Committee elements of the file, commented: “Although investment is much needed to boost a starved economy, the Juncker plan is fundamentally flawed as its focus is far too devoted in private sector investment. It could and should have been far more ambitious. We need smart investment to revive the economy, to enable a social sustainable green economy. Investment in research, infrastructure, education, SMEs, social enterprises, and cooperatives is needed to propel us out of this crisis.

What we need is a 'true public investment plan' for Europe. One which invests in the people and not one that is essentially creating another financial bubble. The ordinary tax payer should not be paying for private profiteers.”